Action Insight Mid-Day Report 1-31-19

Yen Rises as Risk Appetite Fades Following Weak US, Canada and Eurozone Data

Action Insight Daily Report 1-31-19 Yen Rises as Risk Appetite Fades Following Weak US, Canada and Eurozone Data Risk appetite fades today as sentiments are weighed down by a string of weak economic data from Eurozone and US. In short, German retail sales dropped the most in 11 years. Eurozone GDP growth was stuck at 4-year low in Q4. Italy was in technical recession in H2 2018. US initial jobless claims jumped to highest since Sep 2017. Canada GDP contracted in November. Fed's dovish turn yesterday boosted stocks yesterday. But it's worth a thought on whether such turn is a positive or negative sign. In the currency markets, Yen is the strongest for today for the moment, followed by Australian Dollar. Sterling is the worst performing one, followed by Canadian. Dollar is trying to recover as FOMC triggered selloff lost momentum. Trump's comments on US-China trade talks are positive. But Dollar will probably need to get a rather impressive non-farm payroll report for staging a sustainable rebound. In other markets, DOW futures is currently down near 100 pts. FTSE is trading up 0.50%. DAX is down -0.52%. CAC is up 0.04%. German 10-year yield is down -0.021 to 0.169. Earlier in Asia, Nikkei rose 1.06%. Hong Kong HSI rose 1.08%. China Shanghai SSE rose 0.35%. Singapore Strait Times rose 0.50%. Japan 10-year JGB yield dropped -0.0014 to 0.002. Full Report Here Canada GDP contracted -0.1% mom, matched expectations US initial jobless claims jumped to 253k, highest since Sep 2017 Into US session: AUD strongest, JPY second, no follow through in... Trump: Working with China on a complete deal, leave nothing unresolved Eurozone GDP grew 0.2% qoq in Q4, Italy contracted -0.2% qoq Euro rally capped by weak German retail sales and France CPI UK Hunt: Takes a few days to prepare new Irish border... BoJ opinions: Swift decisive actions needed should downside risks materialize China PMI manufacturing broke downtrend, but stayed contractionary Asian update: Dollar weakest on dovish Fed, DOW reclaimed 25k overnight 82% chance of Fed on hold through 2019, more yield curve... Fed drops tightening bias, stress patience, dollar dives Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol US Crude Oil Inventory Increased Less than the Market had Expected FOMC Review – Fed Calls for Patience on Further Rate Hike Brexit Update : Less Clarity, More Confusion after Another Vote Central Bank Views | China Watch | Oil N' Gold | Special Topics USD/JPY Mid-Day Outlook Daily Pivots: (S1) 108.66; (P) 109.20; (R1) 109.60; More... Intraday bias in USD/JPY remains on the downside for 107.77 support. The rebound from 104.69 could have completed at 110.00 already. Firm break of 107.77 will confirm and bring retest of 104.69. On the upside, above 109.14 will turn intraday bias neutral first. Break of 110.00 will extend the rebound. But we'd expect strong resistance from 61.8% retracement of 114.54 to 104.69 at 110.77 to limit upside. Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings Weaker Dollar Ahead, Optimism On US-China Talks Boost Yuan USD/CHF: Dollar Undermined By Dovish Fed NZDUSD Reaches 8-Week High Near Upper Boundary Of Bullish Channel EURJPY Steadily Rises To 1-Month High, Neutral In Short-Term Dollar Suffers Losses As Fed Abandons Hiking Plans Markets Ready To Roar Thanks To Fed Powell Gives Equity Bulls All They Need RBA Forecasts to Be Consistent With On Hold Policy FOMC Review: All We Need Is Just A Little Patience Fed Balance Sheet Shrinking Inches Closer Towards Ending FOMC Adopts A 'Patient' Stance Fed Holds Off on Raising Rates Citing Need to Support Economic Activity as Risks No Longer Roughly Balanced FOMC Statement Enshrines "Patient" Approach to Future Policy Moves FOMC Recap: No More Hiking Bias? Fundamental Analysis | Technical Analysis In-depth Reports Fed Balance Sheet Shrinking Inches Closer Towards Ending FOMC Adopts A 'Patient' Stance FOMC Review - Fed Calls for Patience on Further Rate Hike US Government Shutdown Impact, and the Prospect for More Canada Filling China-U.S. Trade War Gaps? Don't Count On It Is The Eurozone Economy Close To Recession? BOJ Cut CPI Forecasts, But Is it Realistic to Expect Tax Hike will Help Inflation? Chinese Economy Shows Signs of Stabilization in Late 2018. More Challenge Ahead Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 23:50 JPY BOJ Summary of Opinions Jan 23:50 JPY Industrial Production M/M Dec P -0.10% -0.50% -1.00% 00:01 GBP GfK Consumer Confidence Jan -14 -14 -14 00:30 AUD Import Price Index Q/Q Q4 0.50% 0.30% 1.90% 01:00 CNY Manufacturing PMI Jan 49.5 49.3 49.4 01:00 CNY Non-manufacturing PMI Jan 54.7 53.9 53.8 05:00 JPY Housing Starts Y/Y Dec 2.10% 2.10% -0.60% 08:55 EUR German Unemployment Change Jan -2K -10K -14k -12K 08:55 EUR German Unemployment Claims Rate Jan 5.00% 5.00% 5.00% 10:00 EUR Eurozone Unemployment Rate Dec 7.90% 7.90% 7.90% 10:00 EUR Eurozone GDP Q/Q Q4 0.20% 0.20% 0.20% 10:00 EUR Italian GDP Q/Q Q4 P -0.20% -0.10% -0.10% 12:30 USD Challenger Job Cuts Y/Y Jan 18.70% 35.30% 13:30 CAD GDP M/M Nov -0.10% -0.10% 0.30% 13:30 CAD Industrial Product Price M/M Dec -0.70% 0.10% -0.80% 13:30 CAD Raw Materials Price Index M/M Dec 3.80% 3.90% -11.70% -11.80% 13:30 USD Employment Cost Index Q4 0.70% 0.80% 0.80% 13:30 USD Initial Jobless Claims (JAN 26) 253K 210K 199K 200K 14:45 USD Chicago PMI Jan 61 65.4 15:30 USD Natural Gas Storage 30.3B -163B

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